"Cash for Clunkers" Retrospective

Posted by Gail the Actuary on July 31, 2009 - 10:30am

The "Cash for Clunkers" program led a short life--only a week--before its $1 billion in funding was exhausted. What is your view of the program? Should it be extended? What should happen now? Is the apparently short life of this program indicative of what we can expect from other stimulus attempts?

The White House said Thursday it was reviewing what has turned out to be a wildly popular "cash for clunkers" program amid concerns the $1 billion budget for rebates for new auto purchases may have been exhausted in only a week.

Transportation Department officials called lawmakers' offices earlier Thursday to alert them of plans to suspend the program as early as Friday. But a White House official said later the program had not been suspended and officials there were assessing their options.

"We are working tonight to assess the situation facing what is obviously an incredibly popular program," White House press secretary Robert Gibbs said of the Car Allowance Rebate System. "Auto dealers and consumers should have confidence that all valid CARS transactions that have taken place to date will be honored."

E-mail from Oil Drum Staff Member (at time when it appeared program was being stopped as of Thursday midnight):

I have a friend who works at a car dealership, and he reports business has been absolutely insane because of Cash for Clunkers. Phones ringing off the hook, customers swarming the lot, etc.

He's not looking forward to going to work tomorrow. People are going to be pretty ticked off to hear the program's over. Plus there will be a ton of work to do, wrapping everything up. He says they spent hundreds of thousands of dollars advertising Cash for Clunkers, and the ads are still running even though the program is over.

"Cash for Clunkers" was supposed to continue through November 1, 2009 or until the money ran out. But with the number of dealers participating, if each completed just a dozen cash for clunkers deals, the $1 billion dollars would be spent. And some dealers have initiated more like 250 cash for clunkers deals -- 20 times what the government was expecting.

At Fitzgerald Toyota in Gaithersburg, Maryland, it's a different kind of car race as the sales staff rushes to process "Cash for Clunkers" transactio " ns before the government slams the brakes on the program.

Britain's similar car scrappage initiative is on track to run out of money in just over two months. The scheme, which began in mid-May, is designed to run until the end of February 2010 or until the £300m put in by the government has been spent.

Under the program, dealers credit the amount of the voucher to customers who buy new cars. They then get reimbursed by the government.

"There's a whole lot of money out there that dealers haven't collected on," said Darvish, who noted that she's taken in about 200 clunkers. "We've sold the cars and we've processed the paperwork, but we haven't been reimbursed. I'm out about $1 million. The government is supposed to reimburse me for that."

Not all auto recyclers are relishing the government's new cash for clunkers program, which requires car dealers to destroy the gas-guzzlers they get as trade-ins from new car buyers.

Used engines and drivetrains are a big part of recyclers' income from each scrapped car, and under the federal program those engines must be destroyed. The idea is to promote fuel efficiency and help automakers, but it comes at a time when more than a dozen U.S. auto parts suppliers have filed for bankruptcy this year. . .

Under cash for clunkers, the government is advising car dealers to replace a trade-in's engine oil with a sodium silicate solution and run the engine to ruin it before giving or selling the car to a scrap dealer.

The Automotive Recyclers Association says that can damage otherwise sellable parts like pistons - and mean smaller profits for scrap yards, considering it can cost $700 to $1,200 to process a car, including transport and removing toxic items like mercury, Wilson said. Recyclers' profits vary but can reach several hundred dollars for a 6-year-old car.

I had been planning on buying a new car using this program. I had everything ready for this Saturday, but that's looking doubtful now. Oh well, I didn't want a car payment anyway. I guess it's back to the original plan, which is to drive my current vehicle until it falls apart, then buy another used car. The only problem is that my current vehicle only gets about 16 mpg.

I didn't think there would be such a large response, given that you had to have a car that got less than 18 mpg, and which was worth less than $4,500, and you could afford a car payment. They should have done this a year ago, before the GM and Chrysler went bankrupt. They should have also set higher mpg requirements for the new vehicles.

One of the first anecdotes I read about the cash for clunkers program was about a guy who traded in a late-80s Ford Ranger, combined 16mpg, for a 2009 Ford Ranger, combined 18mpg. Uncle Sam supposedly forked over $3500 for that transaction.

I thought that was funny, since I recently bought a 1996 Ford Ranger, combined 18mpg, that for some reason doesn't have a 5th gear (manual). So its mpg is currently around 20 hwy. Since we almost only drive it highway, for only about 1000miles a year, and I have a replacement transmission I need to have put in, I don't feel too bad about the lousy mileage. But it isn't eligible for the cash for clunkers program, since the new Rangers don't get any better mileage than the 1996 models.

Wouldn't it be better if the scale were sliding based on the improved mileage? Something like new combined - old combined * 200 up to $5k. Or better yet, increase gas taxes or implement a carbon tax and use the extra money to fund the program along with a formula. And while we're at it, ditch the flex-fuel slight of hand.

Well, Earnest, the Ranger is a small pickup truck, so first you're comparing apples to oranges. Second, Twilight was pointing out the same thing I did, that over a decade or two, mileage hasn't really changed much, or has gotten worse, which you're basically agreeing with, I think. Finally, you seem to be the one trying to turn a comment on lack of mileage improvement into some kind of peeing match.

Sorry, I was actually agreeing, was just a bit irritated by the thread generally and that seemed the place to insert comment, a 35 year old sports car can get comparable mileage. Once again sorry for the clumsy, it's been a hard week.

This should have been called "Cash for Clowns" -- The requirement that the "clunkers" meet specific low milage requirements means that only owners of cars/SUVs which should generally not have ever been sold were eligible for this bailout. And of course the very modest required increase in milage was a complete joke.

Program was an outrage, a product of our corrupt and dysfunctional government. Minimum requirement for new vehicle should have been 40 mpg. Rewarded those who didn't give a damn about the environment in the first place. Good riddance!!!

Reading in the local paper yesterday interviews with local car dealers it was obvious there was a lot of confusion as to the workings of the program. One dealer seemed to be unaware the trade-ins had to be destroyed no matter their condition.
This morning I read somewhere that many dealers were afraid to pour sand in the engines of the trade-ins for fear the program was ending and they would take the loss.
This is artificial demand,I wonder what new car sales will be after this program ends.

Fantastic program, one family member of mine already took advantage. Traded in a 13mpg SUV for a 30/40 mpg Corolla. I just ran some numbers and using a conservative each car is 12mpg better than the owners previous one, and if we ramped this up to a 10 billion dollar program we could reduce US gasoline consumption by 15%, nearly overnight, nothing short of outstanding.

At least you're doing what the program should be used for. I wish they did this program when gas was at $4 per gallon, people would have had a much bigger propensity for buying more fuel efficient cars.

This is capitalism and people measure everything in terms of money so I think that any milage improvements will cause people to feel OK about driving more.
I don't think we get anywhere without some personal self discipline and a conscious effort to conserve FUEL and not just money.

It doesn't work that way. Jevons Paradox is a paradox both ways. As demand drops, efficiency will go down.

Imagine a shuttle company with 10 vehicles of various efficiencies. Business drops 50%. If they cut routes, business will drop more, so they drive with fewer passengers. In addition, fixed costs must be paid from a smaller revenue stream. Overall efficiency drops. The struggling shuttle company will cancel orders for new efficient vehicles and attempt to pay off debt.

Then along comes clunkers for cash. Just what the doctor ordered, eh? Not exactly.

Borrowing money during an economic decline is a sure recipe to disaster. The additional debt could not be justified through fuel savings. (5 year $30K loan, 20 vs. 15mpg, gas @ $4/gal, 0% interest and $0 trade-in, requires 100K mi/year per vehicle, shuttle vans don’t last that long.)

Those of you who think Cash for Clunkers is a fuel saving move are dreamers. It is pure pork, ladled up to the pigs in Detroit. But if you are in the market for a new car, you might as well sidle up to the trough.

Fuel demand is dropping. Efficiency will go down. Cash for clunkers is evidence of same.

Cold Camel

I took a van shuttle in Oakland last November. My driver (Ethiopian) made one run that day. I was his only rider. He felt lucky, because other company drivers had no trips.

"I figure the truck is only worth about $700 and they're giving me $4,500," so it's a pretty good deal, said Skreen, 58, who works in public works for the city of Orono.

When the government gives away money for free, three things happen:
- A long line is formed very quickly
- The money is used for purposes it was never intended
- The taxpayer is stuck with the bill and a small group of lobbyist is drunk for a week

Geesh, how about we spent that $1 billion on new wind/solar installations? Or maybe in schools to educate the so many youth who've never read a book outside of the classroom, even if they've managed to do so inside one? Heck, I'd be pleased just to have my tax bill reduced by a grand. I have a large one I can't manage to pay, considering what I have left to pay from 08 is 4x what I've made in income in 09.

Yes, I learned not to use tomorrow's income to pay for today's taxes, because tomorrow's income may never come :( *laughs* Does anybody need a PHP/MySQL programmer?

Heck, putting that $1 bil towards unemployment insurance would have been better in my book.

Well, it's an awful good time to leverage federal dollars to benefit a struggling industry. Lets say the average transaction is $20,000, with a federal incentive of say $4000, you're getting the consumer to spend $16,000, or a a 4:1 leverage on the federal input money. And that's ignoring the money multiplier, which could corresponds with likely over $100,000 in economic stimulus for a $4,000 input, even if you ignore the benefits of reduced fuel consumption (even if modest), safety (significant), and emissions (very substantial), all going to an industry that would otherwise lay off people and close plants.

Considering that $16k is less than the average credit card debt, wouldn't it be better to encourage people to put $16k towards reducing that debt? Oh that's right, they don't actually have $16k, they are borrowing that too. So suckering people into taking on more debt is good?

The market for cars is now permanently smaller and we will not need a large number of those jobs building cars, so this won't save them for long. Most likely it is just pulling up future sales anyway - in other words are these incremental sales or is is cannibalizing future sales? I would expect sales to drop like a stone as soon as the program is done.

I seriously doubt there is much emissions benefit, considering that the main emission we have to worry about is carbon. Carbon emission is not and cannot be controlled other than by reducing the amount of fuel burned in absolute terms.

What kind of domestic 'high- mileage' cars are the people buying? You know, the cars that make the auto companies a lot of money like jeep Grand Cherokees and Ford F350 SuperDuty 6 wheel pickup trucks?

Where is my free money?

What happens to car sales in the future?

Since this is borrowed money, did your grandchildren approve of this loan?

What do you think will happen if they decide not to pay it?

This is just more out-and-out theft. Business As Usual in the age of 'Change We All Can Believe In.

Based on the numbers I saw, it looked like the average payout was around $4200.

The whole effect of this is to funnel tax dollars to automakers that should have gone under due to poor management, a shrinking market, and not having appropriate products to compete for dwindling sales, and to sucker people into taking on additional debt to buy those inappropriate products. They'll go under anyway eventually, and there will be fewer potential buyers for all those new EV's that will be on the market any day now (having already bought the old tech).

The only thing I can say positive about this program is that it's better than giving the money to bankers. However, if you've lost your job you won't be paying that new car loan, even if it is smaller. The automakers will still go under, and I'm sure the taxpayers will bail out the banks that made these new loans.

First, the plan includes a fraud - Faux Green. No one in their right mind believes we are suddenly doing this to try to increase gas milage of the nations auto fleet (and I doubt anyone in their right mind actually believes this will have a significant effect on gross fuel use or auto emissions).

Second, the plan is a band-aid that does nothing about the problem of the dying auto industry - it just pushes the problem down the road (by what, maybe a few months???).

This is exactly what the retarded auto industry has done since 9-11 when they started their "O down, O interest, O brains" gimmick that pulled forward demand and wiped out their own future.

Third, the plan has a bribe - "free money" - which is always popular among the Adult-Sized Children who get to vote.

Fourth, the plan creates false economic activity that results in huge waste of resources (while pretending otherwise - see first point above).

Obama is a sicko who steals from children to satisfy a Nation of titbabies masquarading as adults.

I don't often respond to posts that call public figues sickos but in this case I will make an exception.

The dems are blowing it,and blowing it badly,with thier very most dependable core constituency-the working poor who vote- by associating themselves with one giveaway after another,none of which do them-the poor- any good.

Everyone who is not an idiot,liberal or conservative,knows that the whole Detroit bail out was a gift to big biz and big labor-there are no poor among the members of the UAW,except for the ones out of work-and in most places skilled labor never earned what unskilled earned in Detroit.

Teachers with brains(SOME BRAINS at least) and masters degrees all over this country are making less than floor sweepers in Detroit.

As you and so many others have pointed out a fair program would have required a truly major jump in the mileage requirement and ,I will add,come with a loan gaurantee that enabled the folks who serve burgers to have a shot at the program too.

There are MILLIONS of cars that could be junked and old enough that they have very little life left in them that are gas hogs and could be traded in.

But the folks who are driving them can't afford to trade.

A big fat tax on new gas hogs and a tax refundable tax credit paid for swapping up to a real gas saver that is USED would work better and be fair to everybody.

The word in our nieghborhood is that the half dozen or so sold under the program were new sport utes and that the trade ins were older second and third trucks and suvs owned by the well to do and relegated to such duties as towing boats and horse trailers.Of course they were owned by members of two of the dems two classes of best friends-lawyers and bankers savvy eniough to be at the head of the line for thier handout.

The info I have to this effect is based on a conversation with a car salesman who I speak to casually occasionally so it may or may not be true.Barbershop talk.He is upset because he expected to close a sale or two himself dependent on the subsidy,which didn't happen.

I considered trading in my old Jeep - it is worthless but runs pretty good, and I no longer need it as tow vehicle. I would have to put in new ball joints to get it inspected, but that would not have been hard. However, I don't need another vehicle, I would still have had to borrow a few thousand even for a cheap car, and it would have been unethical.

However, if gas prices went up to $4 per gallon again, that would probably be enough to get me to just throw it away. How much time and effort should I put into reviving a gas pig just to have as a backup tow vehicle and for use in the snow? So one could get all those old gas hogs off the road simply by making it unreasonable to keep them running - and likely they represent only a very small number of vehicles on the road and fuel used - the real problem is all the new gas hogs.

Camel,
We are on the same page but dufferent paragraphs,in a manner of speaking.

I am opposed to the very existence of the program,which I have made clear in other posts on other days-this topic came up when the program was under consideration in congress and I got into a real
pxxing match with a supporter,including the mud slinging,etc-which I have resolved to avoid in THIS forum-there are plenty of others well suited to that stuff.

My most recent comments were mostly a rant brought on by the fact that the dems have proven that they are just as much in the pocket of big biz as the republicans,and that they are willing to abandon thier core principles just as fast as the republicans in recent times have abandoned the core principles of conservatism-not that they historically weren't as a rule honored more in the breach than the observance anyway!

It cost the publicans control of the federal govt-and incidentally if they had stuck to the core conservative pinciple of a balanced -well ,it all just makes me too tired to talk about it anymore.

So the dems are shooting themselves in the foot by paying off one constituency at the expense of a bigger one,and one that will always be around.

My CURRENT position,given that this program is now a reality,is that it should be modified to reflect the needs of the voters who put the dems in office.

In the end,the debt of our govt is going to be written off,one way or another.If we are really lucky,it will be inflated out of existence over a preiod of years.If not,we will have a revolution of some sort.

The odds that it will be entirely peaceful are not as high as I would like.

I think it is just about as likely that somebody who works for peanuts who can take on a six thousand dollar debt on a NEW SUBCOMPACT under warranty and get rid of a worn out gas guzzler will make the payments as anybody else.

As Warren Buffet says,his receptionist pays more ,percentage wise,in taxes than he does.

If ANYBODY is going to collect this subsidy,the working poor are morally entitled.My Capuchin monkey fairness meter says so,and by damn and by god the capuchin fairness meter is NEVER wrong;-)

So maybe the money should be distributed by lottery-the way hunting liscenses are often distributed when there are more would be hunters than there are harvestable animals.

I agree with you about sending steel to China.

We may see it again some day in the form of aircraft carriers that are not sailing under the stars and stripes.

We are still the big boys,but maybe not for too much longer.

And I am proud to say that I'm one of the right wing nitwits who TRIED to tell every body else-including the majority of better off the publicans- but none of the PEOPLE who work with thier backs and hands,LEFT OR RIGHT,THEY DIDN'T NEED TO BE TOLD-that we would wind up with a worthless currency,a gutted economy,a new underclass manufactured out of thin air,and chaos in general.

THE CHICKENS ARE HOME.

And even though I am by inclination a free marketer at heart,I do recognize the FACT that markets don't work unless regulated to prevent excesses of many different kinds.

One excess that is of THE UTMOST importance right now is the excessive and wasteful use of oil-and IMPORTED oil at that.

A cash for clunker program that really is designed to HELP the country,rather than as a payoff to particular constituencies,would go a long way toward solving the energy problem.

In no particular order,it should be possible to participate by BUYING a registered for the last two years clunker and scrapping it.That would greatly expand the number of eligible participants,w/o comprimising results-especially if the purchase money is directed toward the purchase of a more fuel efficient car by the former owner of the clunker.

.If it IS SPENT on a car,my gut feeling is that the vast majority of the time it will be spent on a more efficient model.If spent on something else,it's still one clunker off the road,and unless it's spent on a plane ticket,it will almost certainly be spent on something that consumes less energy than a car.

Trucks that have a lot of useful life left in them could be donated to parks or nursing homes or local schools.Institutions of this sort need trucks but seldom put very many miles on them and this would save the embedded energy in a good truck and free up a lot of money badly needed for other purposes.

It is not unusual for trucks owned by this kind of owner to be driven only a thousand miles a year.
Lets not get into the rental bullshit,it works for the homeowner who really does need a truck once or twice a year,but that thousand miles,or two thousand,when running local errands by school maintainence personell is likely spread out over twenty five or thirty trips over the course of a year.

The minimum mileage requirement for the qualifying new car should be at least fifty percent higher than that of the clunker.Ditto the truck.

Not less than thirty five mile per gallon for a car,not less than twenty five for a truck.

The program must be more or less permanent in order that it be fair and not disruptive of normal business.It probably IS ALREADY ASSUMING LIFE ETERNAL,i better keep my mouth shut or I will get what I'm asking for!

Some mechanism such as a gross mileage tax or a higher fuel tax must be included to keep Jevons from sucking up the saved fuel.Balanced by a lower tax on food or spending the extra fuel tax money on public transit.

Viewed as a commons problem,this shared effort would be a net win for everybody.

The current program is a TRAGEDY of the commons problem.It is fattening up on the average excess consumer at the expense of the rest of us and saving very little,in comparison to a well designed program.

A program designed along lines such as I propose would save the taxpaying public as a whole a great deal more than it cost as well as spinning off some substantial environmental benefits.

It would improve our balance of trade and improve our lousy bargaining position with the oil exporters a little.

Of course nothing along these lines will even get a hearing in committee,let along pass the house and senate.But if it did,I believe OBama is man enough to sign it.

I wish he were man enough to PROPOSE SUCH A PROGRAM.

If I were to run for office my slogan would have to be vote for OFM and things won't be quite as bad as they will be if the other guy wins.

The battle to keep control of our own earnings and spend them as we see fit was lost long ago,although it continues.

You and I can't stop the govt from robbing us to pay others but we might win askirmish or two that gets us a little more bang for our stolen buck.

Unless I get very very lucky and some deaf dumb and blind rich old lady takes a fancy to my worthless carcass my personal tax payng days will soon be over and I will be collecting a ss check that is larger than my tax bill.

The temptation to tilt back my head ,open my mouth as wide as possible, and scream "Momma" at the top of my lungs will be overpowering if my stomach is ever empty.

Principles are for the well fed.Twain said it much better but the exact quote has slipped my mind.

Some ancient Greek once said that a democracy can exist only until the its leaders discover that they can buy votes by raiding the treasury,and that collapse is thereafter inevitable.

Thier science didn't amount to much,but that guy was smarter than a yeast colony,and smarter than BF Skinner.

As one of his students said,you can make a chicken peck anything if yiou starve it long enough.

I actually do think that OBama has a really fast cpu,but as Deep Thought((?)who comtemplated the vectors of the indididual particles of the Big Bang) said "this is going to take a while"

Too bad guys like you don't have a prayer's chance in hell of getting elected. The guys that do get elected don't try to solve problems, they try to stay in power. Ah, well. Enjoy the dole while it lasts. I'm re-reading ATLAS SHRUGGED. It's still spot on.

the dems have proven that they are just as much in the pocket of big biz as the republicans,and that they are willing to abandon thier core principles just as fast as the republicans

With all due respect, if you've paid attention to history, this would have been obvious a long time ago.

I agree with Dmitry Orlov - in America we have two parties: the Capitalist party and the other Capitalist party.

I also agree with his advice about national politicians: the smartest thing you can do is to tune them out, just like how they tune you out. Stop paying attention to them. You will lose nothing, and gain some peace of mind.

Actually this is interesting. Often on this site there are posts about some new car technology, that allows great mpg (say for the obvious example the Prius) and how if everyone had one there would be a major dent in US Oil usage (generally not european, as people have more efficient cars there). Then there is always a response in the comments that it will be useless because it will take 15-20 years for the US fleet to turnover and everyone likes big SUVs, cars and trucks except when gas is too expensive, and it isn't right now- which is of course all fairly true in the US.

But now we know that the US fleet turnover time can be significantly reduced if you pay people enough - perhaps down to a decade, given the financial commitment.
That this is possible (and even politically possible in the US) has to be good news for a world that will soon be adjusting to the down slope of world oil production.

You want to explain how "now we know the US fleet turnover time can be significantly reduced"? What percentage of the fleet actually turned over? And how do you know the rate of change would have been sustained?

I think we need to wait to see how much of an actual change happened, and we'd need a year or two to see how deep the interest in turnover is. At this point, we have some pent-up demand, and enough opportunists ready to spend that we burned through $1 billion of free money in a week. If Twilight's right about the average giveaway, that's 238,000 sales. That's not a very impressive increase in sales.

Should there be an accounting for the energy embedded in any functional vehicles scrapped and the energy required to build and retail the new cars? Of course this is moot if the main purpose of the program is economic stimulation and a return to growth..

So true! We're so focused on the cost of the fuel that we often miss the cost of the capital, which accounts for a huge share of a vehicle's energy usage. The recyclers are right to be upset about this, and it makes me sad to think of all that precisely shaped steel being turned back into pig iron. But however inefficient it may be to destroy capital via planned or forced obsolescence, it does stimulate the economy provided that there's enough energy to make a replacement.

What bothers me is that the focus on increasing gas mileage through high technology leads to vehicles that are ever harder to keep running for long periods of time. A vehicle like the Prius could easily be stopped by tin whiskers, salt deposits or other factors that disrupt the delicate electronics that keep it running. This type of problem is not practical to repair, so you have to replace the whole electronic unit, which is less likely to be a standardized part. When you consider the energy embedded in high-tech products, these cars start to look a lot less efficient. It's great for the manufacturers, but bad for customers and shade-tree mechanics, who are being systematically squeezed out by new design features that require lifts, diagnostic tools, and so on. What I would like to see is cars that last and are simple to maintain like tractors and bicycles. Cars that were designed like that have run for 30 years or more and are now "clunkers"...

Jessie,
Life cycle energy costs for cars are 11-15% manufacturing,about 70% fuel and the balance energy used to refine fuel.
About a third of manufacturing is producing the steel and aluminum which is 98% recycled. Replacing a gas guzzler with a Prius or EV will pay back the manufacturing costs in 2-3 years with fuel savings. The biggest use of energy in manufacturing is associated with the car and home energy use of the employees who work at the auto parts and assembly plants.

When the Prius II was introduced I took three test drives and put down a refundable $500 deposit. It was impressive. At that time it was claimed that one would need to drive 100,000 miles to break even. I do not know if that was true but I was trying to reduce my mileage to less than 8 thousand miles per year. I also discovered that even with the subsidy the Prius would cost significantly more than a conventional ICE of a similar size and quality. My deposit was returned and I purchased a conventional Honda.

I just don't see that in his post. It's clear to me that his was a personal choice based on intent to reduce miles driven, and a couple of other datapoints. Nowhere do I see an insinuation that others should make the same choice he did.

It's not fair to single out hybrids. Every new car today relies on complex electronics for vital functions like the ignition and fuel injection. A Prius may have additional electronics over a regular car, but I'm not convinced it's more vulnerable to electrical failure.

I hear what you're saying about precisely shaped steel being turned into pig iron. When Russia destroyed bombers for arms control treaties, they cut the tails off and displayed them for the spy satellites. Too bad we don't have a way to save the clunkers for spare parts while preventing the vehicles from being reregistered.

But now we know that the US fleet turnover time can be significantly reduced if YOU pay people enough

There's the rub - you pay them to buy new cars. I cannot afford to. Neither can the US government, as it has no money either. It is my children who are paying for this. We, as a society, have no means to pay off the debt we are incurring so that people can buy new, fuel efficient cars. This is the problem of having waited too long - we no longer have the time or the money to handle the costs of replacing our infrastructure.

The answer is not to do nothing, rather it would make more sense to significantly raise fuel prices, using the proceeds to fund a shift to other transportation methods that permanently use much less fuel. And simultaneously forcing people to reduce their consumption. I would really prefer a rationing program, but the goal would be the same.

Fuel mileage is not really the goal here, rather it is just the distraction used to make the program palatable. If mileage was the goal, then there would have been a much bigger difference than $3500 to $4500, and in fact the program would have been limited to only new cars that get really good mileage.

This "our kids will pay for this" meme is getting pretty old. The same arguments were made way back in the 1930s when the GOP was claiming we cannot borrow our way to prosperity. Perhaps we are paying the price for the debts run up by Reagan's tax cuts for the rich. Perhaps our kids are paying the price right now considering how many fewer school teachers will be employed this fall in California and many other states. The current generation of graduates are starting their working lives already owing six figure debts. Why was it that we could afford to educate all those veterans in the 40s and 50s and boomer babies back in the 50s and 60s even though the economy was burdened with paying off all those war bonds? The reason is everything else has been sacrificed on the altars of war making, free trade, and tax cuts for the rich.

Why? Because we had not yet peaked in oil production. After the mid '70s when we peaked, then we had to run up debts to maintain our energy fueled growth. Now that world oil production has peaked we will never be able to pay off our debts, including the ones we're running up now so that some can have new cars. Everything is easy with free energy fueled growth.

Maybe I am reading you wrong but I think that reason supply side Ronnie went hog wild with debt was to take advantage of the new oil finds in Alaska and the North Sea. The oil was there and not being used as fast as it could have been. Growth, growth, growth, use it if you got it! As far as the military spending to supposedly bankrupt The USSR, that was then, just as now an easy way to spend money and not have to justify the investment.............and of course make your cronies rich.
Maybe the debt binge was inevitable but it seems that more caution would have been used if those two finds didn't occur.

There are two thoughts to the '"our kids will pay for this" meme' - 1) Our kids can pay for it; 2) They can't. I'm (and most people here) are already under the idea that was can't. Gail, Nate, others have already plainly stated (and so many other financial types have echo'd the same - in sometimes convoluted ways) that debt has to grow, but can't grow unless the real economy grows, which can't happen unless energy production/effiency grows.

So we're screwed. It's just a matter of when. So when it comes to this debt issue, it would be nice if more money was spent on Wind/Solar/etc. We can only change direction, not stop it. So our debt is a moot point, but what we spend it on isn't.

The poor junk man doesn't like it because they sell parts for other clunkers and the program is getting rid of the clunker market.

The government need to raise the miles per gallons quite a bit(to 30 mpg). That would slow the rush to the showrooms a bit and do more for energy conservation but would hurt Detroit (and its new buddy--the US taxpayer) that makes mainly gas guzzlers.

Otherwise, the program is a successful stimulus measure.

Detroit is already saying there aren't enough cars that qualify as clunkers.

What they could do is loosen the definition of beater but raise the mpg to 30. If the average car gets 22 mpg, you'd save 145 gallons per year per car. If a car lasts 15 years that's 2175 gallons total, worth at today's $2 prices well over $4000( not including inflation and discounting).

And all those guzzlers on the lots? The dealers can send them back to the factories and put in smaller motors(or hybrid tech) and then sell them.

Outlawing all the clunkers would be a better program. If less than 25 mpg, and older than 5 years, just take them off the road, and regulate it through the tag office. No mileage, no tag. It would be a free program and do more good too. People with cars that get less than 25 mpg could get a recycling credit equal to the metal in the car.

And you could get a new identity in the witness protection program,but I doubt it would do you any good,you wouldn't last long get started running if you are a politician and your name were to be associated with such a program .

I'm torn here about the opportunity cost of investing this money elsewhere (or not taxing/spending it at all)--as one comment in drumbeat pointed out, how does this expenditure compare to $1 billion in new solar panels, or $1 billion in home insulation grants?

Since we haven't even considered these opportunity cost issues, this is plainly a political/stimulus effort first and foremost. However, IF we're going to do it we should at least roll it out gradually by offering it initially only to high-return exchanges (e.g. where the mpg difference between junker and new car is 30 mpg+), then after two months make remaining funds available for a differential of 20 mpg+, etc.

I planned on using the cash for clunkers program to purchase a new car. I had a 1998 Chevrolet K1500 pickup with 45,000 miles that according to the EPA, get 16 MPG. I was trading in for a Mazda CX-9 FWD that gets 18 MPG. I actually wanted the AWD version, but that gets 17 MPG, so it didn't qualify.

I went to the dealership and had all my paperwork, proof of insurance and registration and my title. Everything was good. Then the sales manager came to me and said they didn't have faith that the gov't would make good on the rebate, so they wanted me to leave a $3,500 check as a security deposit. They said the response to the program had been tremendous and they felt the money would quickly run out. If the rebate fell through, they would cash the check. I didn't like the idea. After all, before they can file for the rebate, they have to destroy my car. I would be out %3,500 and I would not get my car back. I was ready to walk.

The used car manager came over and said they didn't want to wreck the car and was willing to give me a normal trade in for $3,500. The car was in good condition, had low mileage and the only reason I was willing to take $3,500 was I didn't want to try to sell it myself and I knew from experience that dealerships give lousy trade in values. Anyway, I took their offer and have a new car. I would have been OK keeping the pickup but when I bought it I had 0 children and now I have 3 and there was a lot of pressure from my wife to get a car with 3 rows of seats.

I think the program has been great. $1 billion dollars is nothing when it looks like the gov't is going to run a $2 trillion deficit this year. It amounts to about 1/6th of one days deficit. As far as bailout money goes, this has been way more successful than anything else the gov't has done. All the other bailout money has gone to buying toxic assets from banks, which does nothing for the economy. Not only should the gov't add more funds to the program, they should expand this to kitchen appliances. I have a 17 year old fridge that I would like to replace.

"I planned on using the cash for clunkers program to purchase a new car. I had a 1998 Chevrolet K1500 pickup with 45,000 miles that according to the EPA, get 16 MPG. I was trading in for a Mazda CX-9 FWD that gets 18 MPG. I actually wanted the AWD version, but that gets 17 MPG, so it didn't qualify."

FYI the car you are purchasing must get 10 mpg MORE than the trade in.

Not true. Under the present program, a 1 mpg gain is enough for some vehicles.

If both the new vehicle and the traded-in vehicle are category 2 trucks and the combined fuel economy value of the new vehicle is at least 1, but less than 2, miles per gallon higher than the combined fuel economy value of the traded in vehicle, the credit is $3,500.

You traded in something that got 16mpg for something that got 18? Can you explain why on Earth my tax dollars should help you in this, and also why, if you read here on any regular basis you would by a new vehicle that gets such terrible mileage?

Several years ago I traded a very nice vehicle that got around 19mpg for one that got 33, and had much lower payments as well. It was a very good choice, but it certainly wasn't any of your business, nor would I have expected the rest of the nation to help me pay for it. The motivation was that I understood what was coming and it was in my best interest to do so.

My house would benefit from improved insulation, and $3500 would be a big help in doing that. Think I should hold my breath?

"You traded in something that got 16mpg for something that got 18? Can you explain why on Earth my tax dollars should help you in this, and also why, if you read here on any regular basis you would by a new vehicle that gets such terrible mileage? "

Read his post, he did not get the rebate, he got a trade in. Once again, YOU CANNOT GET THE REBATE UNLESS YOU BUY A CAR THAT GETS 10MPG MORE THAN YOUR "CLUNKER".

Once again, you are misrepresenting Cash for Clunkers. An improvement of 1 mpg can be enough. And the dealer was prepared to give him the rebate, except that the dealer wasn't confident that funding would remain for the program.

If both the new vehicle and the traded-in vehicle are category 2 trucks and the combined fuel economy value of the new vehicle is at least 1, but less than 2, miles per gallon higher than the combined fuel economy value of the traded in vehicle, the credit is $3,500.

You too? Me as well, with my 1985 Honda Crx that gets in the 38-50mpg range, depending on how it is driven.. Little thing, but it goes! 295,000 miles as well. I picked up mine for 350 dollars, plus 70 dollars for a rebuilt alternator.

The car I drive - less than 1000 miles per year - is a semi-recycled 2002 Hyundai Accent hatchback. I call it semi-recycled since I specifically shopped for an efficient car that had been crashed and vandalized but would still pass safety inspection, so I got it for $1100, caulked on an $8 piece of plexi to cover the stolen sunroof hole, removed the punched-out locks so the doors are functional but non-lockable, and voila. It gets over 40mpg the way I drive it (modest hypermiling techniques). The big dents in the side are a plus: the car is its own anti-theft device. And it's actually possible to park it between two SUV's.

Perhaps it's worth noting that the CARS program ran thru it's mere $1 Billion of funding as the U.S. House added more than $6 Billion to the Defense budget for unwanted purchases of military hardware. And, money spent for military hardware is well known to provide fewer jobs than spending the same amount of money for most every other purpose. If the Congress were actually thinking of stimulating job creation, that $6 Billion should be shifted into the CARS program..

There are one heck metric butt-load more well-paid defense contractors than car salespeople and car factory workers. Including people who twiddle with words and numbers on Excel, Word and PowerPoint for a living.

BTW, all those opining to this c4c being a sop to Detroit must now be counting all the Japan, Inc and European car makers as 'Detroit'. Buying 'foreign' (i.e. not Chrysler or Ford or GM)cars is fair game.

Whatever the merits or de-merits of this program, it is a (small) step in a better direction than Shrub's 'Tax Rebates for Hummers and Tahoes' program. Hopefully that program was terminated.

I fully agree that the mileage delta terms of this program is a joke. Should have set the bar as a minimum of 30 MPG City, withan increasing reward scale to 50 MPG city and beyond. If all the money went to Toyota and Honda, then they got rewarded for having the guts/foresight/wisdom to have cars for sale in the high-mileage segment...the 'Big 3' would then have to adapt very quickly (unlikely) or die (deserved fate).

Yes, this is somewhat amusing. The US defense budget is somewhere around $1 trillion per year (not including wars in Iraq and Afghanistan), about half of the entire world's defense spending. Add in US allies (NATO) and you have something like 3/4 of world military spending.

The US could cut defense spending by half ($500 billion!) and still remain the sole military superpower. What could $500 billion per year do for nuclear power, wind, solar, energy efficiency, rail, and so on?

It is more than 23,000 sales. The 23,000 sales was an earlier number. The total number was supposed to be something like 250,000 (still not a lot compared to hoped for annual sales of 17 million, and actual annual sales of less than 10 million).

It appears that there is a strong push to extend the c4c program. I just heard on NPR that the program will be extended for a short period of time. There looks like there is a concerted push to extend it for a much longer period - CNN.

The House voted Friday to transfer $2 billion in emergency funding from the economic stimulus plan to the "cash for clunkers" program, ensuring it has sufficient funds to continue.

The Senate will not consider an extension until next week, according to Sens. Carl Levin (D., Mich.) and Debbie Stabenow (D., Mich.). Even then, it is not certain the measure will be approved in the Senate without extensive debate.

Republicans will almost certainly use any legislation related to the recovery plan as an opportunity to revisit the stimulus debate. They will likely push for other changes to the plan, which most of them voted against and continue to oppose.

Lawmakers focusing on environmental concerns may not support an extension of the program unless the emissions standards in it are tightened.

Problem: fuel consumption in the transportation sector has become a public-policy issue for a variety of reasons.

Solution: expand the transportation sector even more by adding to the lavish overuse-encouraging subsidies it already receives.

Absolutely typical government power trip. If you're having trouble sustaining something, throw money at it indiscriminately to expand it. When that gets you far enough behind the eight-ball, declare that you're oh-so-sorry about trampling the few liberties that are left, but you're "forced" to ration it.

Then you get to micromanage everyone's lives through their ration cards as in any other totalitarian state, which is what you were really after the whole time. Now, when folks want to take the kids to the soccer game, they needn't bother too much about the cost, because that's subsidized. Instead, they've got to pay your bagman some sort of bribe, or else they'll be left so far back in line they'll never live to reach the front. Whoo-eee, life is so much "fairer" that way.

Yup, Congresscritters often seem like kids who never outgrew pulling wings off flies...

Paul
I am with you all the way and I will guess that ninety percent of the others agre if not quite so strongly.

The interesting thing is that your comment could have come straight off of the Rush Limbaugh show and you would have been congratulated as a sharp thinker by El Rushbo and cheered by his audience.

I mention this to remind others who constantly bash right wingers that the right wingers are right about some things. Quite a few things actually ,if you stop to listen to what they are actually saying,rather than distortions.

I agree, the right wingers often have a better intuitive grasp of the unfairness of life.
I think many left wingers honestly believe that everyone can enjoy an American standard of living, if we just played nice and gave peace a chance.
Right wingers are more likely to understand that the American standard of living is sustained by unfairness.

That being said, the things said by the left in public seem closer to what they actually think.
The things said by the right in public are often nutty, because the truth is politically impossible.

the right-wingers say such nutty things because they can't say what's really on their mind.

it's easy to make fun of right-wingers for their nuttiness, because it is so obviously insincere. i'm more afraid of left-wing nuttiness, because it's heartfelt.

right-wingers can be anti-immigration, for the sensible reason that they want to share our limited resources among fewer people. limits are unspeakable, however, so their stated reason is some wingnut thing like swine flu. left-wingers, however, simply won't admit to themselves that such limits exist.

the right-winger lies to others, and the left-winger lies to herself.

wing

beliefs

words

hypocrites?

self-deluded?

right

realist

nutty

yes

no

left

nutty

nutty

no

yes

don't get me wrong, i'm no fan of either.

what i really hate is the "either you're with us or against us" attitude of both wings. i'm not with the left, but that doesn't mean i'm a nutty right-winger either!

this is tricky... it's important to coax Americans into driving more sensibly, but at the same time perhaps an education campaign for US consumers and some tough love for the car companies could make this sort of chnage more systemic

Wow, if only I had known that the government would reward me for buying a carbon spewing monster, I might have bought a gas guzzler instead of a reasonably energy-efficient automobile the last time I bought one.

One of the most ludicrous features of this bill is you get a big wad of cash from the government for the wonderfully environmental act of buying a gas guzzler that is just slightly less of a belcher than the one you are getting rid of.

To me this lends a lot of credibility to those who contend that if we expect to rely on the government to steer our energy future then we are dead in the water.

1). Market forces will get us to a renewables world, but their drawback is that they don't kick in fast enough to make for a smooth transition.

2). Intelligent government action could provide a smooth transition to the future.

3). Unintelligent government action, however, could mean that there is no future at all.

Unfortunately, recent history suggests that scenario 3 is the most likely path for our energy futur.

I believe in transition and this wasn't even the first step, it was half a baby step.

It was over a year ago that my wife and I switched to motorcycles. An 800 that gets 50mpg, a 250 that gets 75mpg, and a 50 that gets 100mpg. We commute year round on them. I still have an SUV for trips to Lowes and Walmart or towing the lawn equipment or kayaks 25miles to the lake occasionally. It gets low low mileage but we only use it for its intended purpose. Cash for clunkers should have started people on the road to transition. I believe this decade will be extreme transition time. I would rather have seen give us your under 20mpg vehicle and we'll give you an under 500cc motorcycle, helmet, safety course, jacket. The roads need less cars.

Secondly, what happened to those good little 4cyl pickups of the 70's that got 30mpg. Why are the small pickups the size of a house and get 18mpg? I could just as easily use something like that as my explorer but they won't build them.

I would rather have seen give us your under 20mpg vehicle and we'll give you an under 500cc motorcycle, helmet, safety course, jacket. The roads need less cars.

The C4C bill was supposed to address environmental impact, too. Even when in compliance with the 2006 EPA standards, motorcycles can spew up to 12g/km CO. A 2005 SUV runs 95% cleaner than a motorcycle not in compliance with 2006 EPA standards.

An SUV burns 5 gallons of gas to go 75 miles - A Motorcycle burns 1 gallon. So 5 gallons of gas burnt is less polution than 1 gallon of gas burnt EPA compliant 2009 250cc (Honda) motorcycle. Somebody went to public skool.

All my motorcycles burn clean. They don't smoke. The engines are computer controlled. So for every 500 gallons of gas the Clunker burns I burn 50 that's 1000 percent more gas per vehicle. The BRIC countries do not care about pollution neither does anybody else outside of Europe and North America. The greenies are fighting a losing battle. I'm pushing a transition. I used to ride bike but the roads in the south make it impossible and the trucks will use you as a hood ornament so that's not possible until the traffic thins out.

Apples and oranges. Air quality vs. fuel efficiency. There are dirty, efficient vehicles, like a 20 year old Civic or a motorcycle with a modified exhaust, and there are clean, inefficient vehicles, like a brand new full-size truck. I know lots of motorcycle owners modify their exhausts, but still not fair to compare stock SUV to modified motorcycle.

If you live in LA or Houston, yeah you should worry about clean air, and for that you should buy the newest, cleanest vehicle possible (motorcycles included because many come with 3 way catalytic converters now).

Reality Check gets it right in my experience. I live in the Phoenix area where vehicles have to pass an emissions test in order to get or renew license tags and I have owned a number of motorcycles that pass invariably at the low end of the allowable for CO, hydrocarbons and particulates.

All My 1000+ cc carburetted bikes have gotten 45 mpg or better and the newer fuel injected and computer controlled ones (even Harleys, so I understand) do much better than older models.

But they don't test for CO2 because that particular gas is pretty much proportional to the quantity of gasoline burned. Motorcycles burn less fuel, so ipso facto they produce less CO2.

Lets transition. Where I live it is not practical to walk many miles a busy freeway. It's suicidal and will get arrested same with bikes. Walkable HA! Not in the Southern US. Less cars, more motorcycles, scooters, bikes, and buses then if there's money left light rail. When we get down to buses, scooters, and bikes then we can be safe to walk.

I think the process could be made more efficient by simply scrapping the new clunkers as they roll out of the factory.

Better still, from an energy standpoint, would be to have the assembly lines make imaginary clunkers which would subsequently be immediately recycled into stray thoughts. It would involve little change in actual union labor performed and would minimize counterparty risk.

This would pump up the economy and save energy. Those carbon credits could then be sold, and the proceeds distributed as checks sent directly to the least responsible Americans as "patriot rebates".

If this didn't prove sufficient, those with a history of buying efficient cars, using public transit, or riding bicycles could be made retroactively ineligible for medicare and social security programs.

Well sure, it'd be un-environmental to ignore a pre-existing distribution network that serviced the demographic.

Actually, "patriot rebates" may have a broader future. All sarcasm aside, I think Americans would even accept a hefty carbon tax starting in two years if they got $10,000 free cash this year towards the purchase of a more-efficient car. Of course, most of them would actually use it to buy toys, hookers, and trips to Vegas, so it would stimulate the economy in the near-term while depriving folks of plausible sniveling rights down the line.

The way you sell things to americans - anything, really - is with a big upfront freebie. 'cause, y'know, the future isn't real.

Greenish,
You missed your calling.Your books should be right along side those by Douglas Adams and Kurt Vonnegut and you would be rich and famous and you could afford to fund a sustainability research program on my little farm.

Many thanks, but I'm a piker next to your recent posts on many issues; you've become a must-read favorite.

I have bunches of book outlines, even a very patient agent, but realistically the odds are probably good none will ever be written. Partly the "high standards" thing you mentioned, partly not being able to convince myself that the world actually needs my books. I'd love to encourage YOURS though. Click my user name and drop me a line if you like. Riches and fame would be dead easy next to confronting the pickle our species has gotten itself in... but there are easier ways than writing. And writing is in some ways too personal to do for money.

Thanks to the wisdom in this blog, I have figured out a solution to this car mess. All new cars should be purchased by the government for whomever wants one. You lease it back from Uncle Sammy. Uncle Sammy can decide if you deserve a car and he can even pick the color —if you’re worthy. If you have a job, you automatically qualify for the GMC, (Government Managed CARS) Program. If you want a big fat gas guzzler you pay a big lease…if you go green, you get off easy. The GMC can then include all of the devices they have been wanting to install, like automatic engine disablement if you’re in a car chase, an alcohol tube that can measure your intoxication while driving and a stun gun airbag could be installed in case you start dozing off when driving. Think of the commercial opportunities and implications! When the car has reached end of life, it can (through GPS) drive itself to the junk yard and self destruct! All this idea needs is a little more development, maybe 1000 or so pages, and congress will sign it! I think we’re back on track — time to reinvest in Detroit!

The thing I found interesting is that the "old cars" they want to get rid of can only be 25 years old!
My 1977 Chevy 1/2 tom pickup gets 10 mpg, my 1979 Chevy 1/2 ton 4x4 pickup gets 14 mpg and I have in reserve a 1981 Ford pickup that would get only 13 mpg. All are rusty wrecks (body wise - mechanically in excellent shape - I do my own maintenance) and not a single one qualifies for the program.
The "Cash for Clunkers" program was just another case of government handouts to the well to do in most cases.

There is no strategic planning with respect to national policy regarding automobiles. The magic of the market place at work, you can compare mileage and show that essentially there have been no marked improvements, on average, using US manufactured cars, for decades; why? The businesses dictate the terms and the government falls into line. This program is a perfect example. Having painted themselves into a corner business decided it was decided to walk away on a gold bar paved path. It would be interesting to estimate the fraud in this program, I guess around 30%.

Under cash for clunkers, the government is advising car dealers to replace a trade-in's engine oil with a sodium silicate solution and run the engine to ruin it before giving or selling the car to a scrap dealer.

Under cash for clunkers, the government is advising car dealers to replace a trade-in's engine oil with a sodium silicate solution and run the engine to ruin it before giving or selling the car to a scrap dealer.

Funny, that seems to happen every time I rent an SUV, although sometimes if sodium silicate isn't available karo syrup seems to find its way into the gas tank. That's why I always buy the insurance.

Since this is a site about energy and peak oil, shouldn't we focus on the energy ramifications of this program?

One of the irony of this program is that clunkers that are at least 1984 are vehicles that by and large, have relatively modern exhaust emission systems and greatly downsized from the behemoth engines that are first generation electronic ignition / mechanical controls mated with inefficient drivetrains and transmission ratios of pre-1980 cars.

The cars that qualify in the program, namely, 1984 or later models, are actually not the most inefficient vehicles on the road.

If they are driven relatively few miles, they actually are very economic and energy efficient if the alternative is to consume energy to manufacture a brand new vehicle that is in turn, driven few miles.

Furthermore, by spurring the auto industry to build and sell more new cars when we already know peak oil is upon us is simply not very cleverl

We, on this blog, know this temporary lull in oil prices is deceiving buyers to buy more car and engine than they need.

Furthermore, the industry is within 2 to 3 years of delivering a generation of gasoline fueled vehicles with much better mileage --- e.g. the new Fords with direct gasoline injection and small turbo/super chargers.

At the same time, we are still at the peak of the horsepower race - which like the tailfin race of another era - gave us sedans like a Toyota Corolla with standard ngines that develop over 130hp in the USA.

This level of performance is far in excess of any reasonable, sensible need that a sedan optimized for fuel economy should have, and comes at the expense of lifetime fuel economy penalties in the form of heavier engines, transmissions, brakes, chassis, that is paid even in the absence of a lead footed driver.

By having the US (and EU) governments purchase cars now to "stimulate demand", they have taken these buyers out of the market for many years, and perhaps, make it less likely for them to upgrade to a truly fuel efficient vehicle that will be widely available in a few years --- when petroleum is back to $200 a barrel and gasoline is scarce and expensive at over $7 a gallon.

Then there is the stupidity of the program administration --- which required cars turned in to be disabled by having a mixture of water and sodium silicate and water poured into the engine and run --- in effect, sanding the engine and making it unusable from the inside.

The only problem is, scrap yards routinely salvage engines and transmissions from their wrecks --- it is probably one of the best profit makers in a yard to salvage these parts and resell them to be either rebuilt or, if the mileage is low enough, placed straight into another car with a bad motor/transmission.

Not surprisingly, scrap yards are now saying they may not accept the vehicles (unless they are compensated otherwise) because the disabled vehicles are nearly worthless, or worse, actually cost the scrap yard money to dismantle (drain fluids, etc.) them --- except to be shredded and sold for scrap to China or other steel mills.

No one that rammed this program through, which is really a car dealer bailout and bribery program to complement the GM / Chrysler / Auto Parts bailout program, truly understand energy economics.

While the study of energy impact on the USA has yet to be done on this program, I have a suspicious hunch that this program will end up costing more energy than it saves.

Your point about causing people to trade too soon and thereby reducing the sale of REALLY efficient cars a few years down the road has me slapping my own head and thinking I'm a ninny for not beating you to it!

There is a saying in farm country that goes:

NEVER open a gate unless you KNOW what lives on the other side of it!

The closest equivalent I know of in the language of the ivory tower is "Beware the law of unintended consequences!"

It just doesn't have the same emotional impact imo-but then I have been chased by a bull!

House OKs $2 billion more for Clunker program
House passes bill to add $2 billion for Cash for Clunkers program.

The House voted today to spend another $2 billion on the cash for clunkers program. "I'm pleased about the progress made in the House today about the cash for clunkers program," said President Obama immediately following the vote. The fate of the trade-in program was in doubt after concerns it may have burned through its $1 billion budget less than a week after it was launched.

How much carbon is released into the atmosphere to make a motor car?
Replacing the fleet will release more.

I have some bitumen at home. I want to make carbon fiber. How do I get the sulphur out of the bitumen?

When I was born there were 3 billion people on the planet.
I hope that this gas conversion thing will buy us enough time to drop our population to 1.1 billion. But, hey, I am an optimist.

How can I improve my grand sons' survival chances?

"Darkness at the break of noon,
Shadows even the silver spoon.
The home made blade, the childs balloon,
Eclipse both the sun and moon.
To understand you know too soon,
There is no point in trying."
Bob Dylan.

Everything that's happening continues to be fully consistent with the broad spectrum of scholarship on historical collapse. And, in particular, the sunk cost effect in decision-making which is now thought to have also been a key ingredient in the collapses of antiquity, and is of course strongly present in Washington's full range response to the financial crisis. After all, we are the same human beings of AnkorWat, and EasterIsland. So why would we do anything different? We have advanced now, basically, to printing up money in an attempt to retain all the old systems and practices. Cars, houses, highways, and so on. There is no "green" economy on the way. There is no transition to a new system.

It seems like the only way we can even theoretically have cars long-term is if we can figure out a way to keep the same cars, and only replace parts as they wear out, in the most energy-efficient way possible. Even this would eventually degrade too much.

The auto lobby pretty well gutted the Cash for Clunkers program from an economic and environmental standpointHandouts for Hummers

I did some quick numbers on the relation between how much money could be given back and MPG rating

12,000 miles per year average driving
15 MGP
800 Gallons per year
$2.5 per gallon
$2000 per year expenditure

Bump that up to 25 MPG and you would cut expenses to
$1200 per year for an $800 per year savings.

Over 5 years that would inject an extra $4000 into local economies that would otherwise have been spent on gasoline. If the tax was spread over the whole local community then the community would be ahead on a $3500 trade in. That assumes the money spent on gasoline is spent on clothes, food, housing, etc.

Now that was if the MPG rating improvement had been kept in the bill. But it wasn't and it is worth looking into who voted to water it down.

Will to be interesting to see if gubmint can manage this program well enough that they actually get the dealers paid for the car deals that they have made under it and how long that might take.

Heard on the radio that dealers in D/FW TX area are very concerned about that. Having to file long forms online, gubmint computers crashing, fear they will not get paid and left holding a "clunker" that they have committed to disabeling as collateral on a $3500 note to the gubmint. They said it made business good for a few days, but are worried about the realities of follow up procedures.

It is a prelude to Obama-care folks. Watch and see how this plays out and you will get some idea of how your health care will be handled by the government, oops, I meant gubmint.

While I am at it, your congresspeople are on their break until mid-September or so, be sure to contact them while they are back in their districts and express you opinions relative to health care, bail outs, executive bonuses, stimulus packages in general, this C4C thing, and also about all those people in your area that are finding new JOBS. Tell them how you want them to vote on these issues and if they don't tell them that you will do everything in your power to unseat them in their next election. Especially you folks who have elected to represent you people like: Nancy Pelosi, Barney Frank, Harry Reid, Diane Feinstein, Dodd, Boxer, Schumer, Al Franken, Rangel, Waxman, Durbin, Kerry, Specter, Byrd, etc., etc., and etc..

Darn skippy, bubba, I will write and call to tell them to vote for SINGLE PAYER health care or I will boot them out.

I have TRICARE from Uncle Sam for Life (as long as the government stays in business). We are already paying out the wazoo for health care...let's cut out the useless leeches in the process (insurance companies).

Or we could elect someone like Palin and we could get another health care 'plan' like Shrub's Medicare Part D prescription drug indusrt give-away...he and his rethug cronies wrote into that bill that it is illegal for Uncle Sam to haggle with drug companies for a bulk/group discount price.

From a systems point of view, this scheme is giving money to people who are already relatively well off - they have savings and/or can get credit to replace their vehicle. It's not making money available to those who drive old inefficient cars but can't afford to replace them.

So it's increasing economic inequality.

Under the program, the "clunkers" have to be scrapped. So it's interrupting a stream of vehicles that the poor could eventually have bought and used to go to work. That will drive up prices of vehicles to the poor and make it harder for them to earn income.

It won't materially change employment, because those people lucky enough still to be employed are working reduced hours. Their hours may increase slightly, that's all.

I would agree on benefiting the relatively well-off. The people who qualify have jobs and are probably a little on the frugal side. Otherwise they wouldn't be going from a clunker to a new car.

It will be interesting to see the impact on sales by company, when monthly sales figures are available. It would seem like Japanese companies will benefit most, since US companies sell fewer fuel-efficient cars. Also, the impact on profitability would be greatest for Japanese car makers. While US companies sell fuel efficient cars, they generally don't make much money on them.

Here's a thought on that frugality. Lots of families have two or more cars. If the cars have been around long enough to become clunkers, there's a reasonable chance the family has more (or bigger) kids than it used to. So if it's time to buy, trade the guzzler in on a new bigger sipper and get the $4500. Then get a new or lightly used bigger guzzler. Now, presto, you've got bigger cars burning more gas and Uncle Sucker gave you a $4500 gift to help. Heck, if you've got three or more cars and the timing is right you could daisy-chain this thing indefinitely.

We will not address climate change or resource shortages except by rationalizing our own comfortable lifestyles and blaming others as a rationalization to steal their resources to supplement our own personal affluence.

This goes for all of us humans: when the going gets tough we kill and steal other people's good stuff.

The CARS program does indeed constitute a huge fraud. CARS is not, contrary to claims, helping the environment. CARS does not help us to consume less oil or help us into a "New Economy." The "New Economy will not invite everyone on the planet -- let alone the USA -- to pursue happiness by spending more and consuming more.

We will keep doing what we do until we damage ourselves and our global habitat to the point that our complex systems implode.

War will hurry this process along, while making some people very rich for a short while.

CARS buys a little more time to keep the illusion going. Obama may indeed be a good man, but like GWB, he is a very bad wizard. So are we all, at this point.

Note that our non-representatives in the House and Senate are performing another feat of illusion with regard to the organized crime syndicate known as the Health Care Insurance Industry, which will use the government reform to help them extract even higher profits from those least able to pay for health care services and products.

Who actually lives in an illusion? None of us do -- which is why the illusion will inevitably end.

Even as the lights go out we will all be tempted to blame others and rationalize our own behaviour as being just fine, more or less.

We have run riot over the planet, poisoned air, water and soil, and leave the wreckage and carnage behind us without even enough awareness of how we relate to the planet and to each other to understand what we have done.

Many of the comments on this thread are amongst the most surreal that I've ever seen on TOD. But then, they're coming from US citizens. It's difficult to believe that people are still speaking of using vehicles which offer less than twenty MPG (let alone fifty) as if that's OK and no big deal. Blindness in the face of onrushing catastrophe doesn't even begin to describe it. Maybe you should rename your federation "The United States of Easter Island", because y'all are sure as hell going there. Good luck! You're going to need it.....

Since no one else has replied to your comment, I will take a stab at it.

To your quote (I do not know how to make the blue box) "Blindness in the face of onrushing catastrophe doesn't even begin to describe it. Maybe you should rename your federation "The United States of Easter Island", because y'all are sure as hell going there. Good luck! You're going to need it....."

Your first sentance is what I call "head in the sand syndrome". We must keep our collective heads buried as deeply as possible so that we do not see the impending shit storm bearing down upon us. This way we can continue with BAU, until we arrive at the cliff of course. And, based on his recent activities, Obama is either completely peak oil unaware and/or just flat out doesn't care. I personally think it is a whole lot of both.

To reiterate from my post above, just watch how the government handles this cash for clunkers debacle. It will likely be a mini version of what Obamacare will be like, except on a far grander scale and peoples lives will be at stake, not just old cars.

Your comment "The United States of Easter Island", while possibly somewhat accurate, especially in the long run, to make such comments is considered "doomerism", and we do not like to be labeled as doomers. We prefer to think in terms of "soft landings", "recovery" and "gradual population adjustments" and such.

Finally, thank you for your wish of good luck. You are right, we will need it.

I was wondering where they found the extra money to fund more Cash for Clunkers. Over on The Automatic Earth I saw two articles with more info, excerpts below

----------------
The NADA poll found that actual sales were as high as 14 per dealership, suggesting that more than $900 million had already been used. The association sent its findings to NHTSA early Thursday morning. "That's when the alarms went off," said one DOT official. Concern spread to the White House and its Office of Management and Budget, where officials began to comb through the federal budget for money they might draw on to pay dealers should the program bust its budget. Early Thursday evening, OMB sent out word that there was none to be had.

Transportation Secretary Ray LaHood began briefing lawmakers Thursday afternoon, informing them that the fund was depleting rapidly. Around 4 p.m., Mr. LaHood called NADA President Phillip Brady and told him the department was "terminating" the program at midnight that night, according to NADA spokesman Bailey Wood. A spokeswoman said Mr. LaHood wasn't available to comment. As word spread, lawmakers said they were inundated by phone calls from car dealers and voters in their districts, expressing anger that such a popular program might die. Late Thursday, the White House scurried to announce that the program had not been suspended. Some Senators are expected to push for more aggressive environmental targets for the program as part of any extension.

-------------------

Congress moved Friday to inject fresh funds into the wildly popular "cash for clunkers" program after it nearly ran out of money, threatening to become a symbol of government bungling. The House approved moving $2 billion from a program that backs loans to renewable-energy companies into the car-repurchase program, which apparently burned through its allotted $1 billion in just a week.

-------------------

OK, done with excerpts. Now I really want to say Hell No. They took funds from "a program that backs loans to renewable-energy companies" for this? Insanity.

It appears to me that the main motivation behind a popular give-away like CARS is simply to clear the domestic dealer lots of languishing SUV's and other modest gas-mileage vehicles as soon as possible. That's why the fuel-efficiency bar is set so low.

The requirement that the 'clunker' engines be destroyed and the bodies crushed is probably intended to give a little boost to the auto parts manufacturers and suck a lot of good used cars out of the market so more people have to buy new vehicles.

I don't think there's been a lot of high-level or long-range thinking about esoteric energy or transportation policy concerns here. This program was promoted by the car makers for their own immediate benefit, and passed by Congress for their own immediate benefit.

Take a slow calming breath and then repeat the following aloud, slowly.

There......is......no......future.

There......is......no......future.

There......is......no......future.

We make this choice every day in more ways then we can count.

We cannot manage the planet any more than the mountain goats manage the mountain.

We cannot manage water, soil, and air anymore than flowers can manage the soil, air, and water in the field they find themselves.

We are a bit more complex than flowers or mountain goats perhaps, but not nearly as much as we might think.

Our collective efforts devolve into war and so to developing stories that we tell ourselves to make our own violence seem reasonable and justified.

Any glimmer of empathy is drowned out with alcohol or other drugs, and especially with the digital media crack-cocaine that we feed to ourselves in myriad ways.

Had Obama tried to bring stringent efforts into this kind of program related to the environment, he would have been brought down by a pack of howling dogs -- the auto industry and its lobbyists, the Republicans and the so-called Blue Dogs who are the Dems most overtly like the Repubs.

This program shows an Establishment trying desparately to maintain the status quo.

Perhaps some believe that this is needed simply to buy more time to plan and execute "Greener" programs -- oh, wait, did I just use the term "execute?" That was Freudian slip. There is no future -- we've already executed all those "greener" options anyway.

We each do our best bit, and then we die. Bittersweet. What a wonderful and terrifying time to be alive, eh?

I think 2008 that while probably was peak oil; it was definately "peak SUV". Now it is time to rid the streets of these old clunkers. Further I think we should preserve a few SUVs for a diorama for in a museum, like they do for dinosaurs.

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